Drought Impacts Australian Livestock Market

The Australian livestock forecast points to higher slaughter, lower prices, and fewer future exports of live cattle. The United States Department of Agriculture (USDA) increased the country’s official 2018 livestock production forecast slightly by 200,000 head to 26.7 million head. Because bone dry weather has hit the Australian cattle industry hard, forecast beef and veal production and slaughter rates have increased. In an attempt to preempt losses due to drought conditions like those in Northeastern Australia, producers tend to slaughter larger percentages of their herds. This has led to a flood of market supply and lower prices. The Eastern Young Cattle Indicator (EYCI) fell to $5.09 Australian dollar (AUD) per kilogram carcass weight, a drop of $1.09 AUD from the start of 2017. A stronger AUD and restricted market access to Indonesia caused the USDA to lower this year’s official forecast on cattle exports to 900,000 head. As dry weather impacts Australia’s livestock market dynamics, Gro Intelligence subscribers can monitor trends in the production and price of cattle into 2018.